2 ms·
So how is this going to work? Imagine you're a small online retailer and people from every state buy your stuff. Does that mean each state can send you a tax
by methehack 8y ago
So how is this going to work? Imagine you're a small online retailer and people from every state buy your stuff. Does that mean each state can send you a tax bill? Without knowing what you owe? And what if you ignore it? What recourse does the state (that you don't live in or don't own a business in) have? Seems like none or very little. Plus, the administrative burden could be quite large for any given state. And it's a crapshoot from the state's perspective, since the state has no idea which retailers are heavily used in their states. I wonder if the states will work together on collections and figuring that part out... Seems like in the short term small sellers will be ignored by the states and the large sellers will loose. Mid to long term -- who knows... Obviously, I'm guessing.
And another thing... The idea that the states are "losing out" on revenue seems like a very simplistic way to look at things to me. First, the states have undoubtably already adjusted their tax structure to get the revenue they want/need. Lots of things affect that and the states adjust all the time. The weather (literally) for instance. It's not like there's an unaccounted for shortfall.
Second, the retailers in question are always local to a given state and their online businesses contribute to their home state's revenue. If those businesses have the administrative burden of managing sales tax across fifty states they may contribute less to the given state's revenue. Or -- they raise prices.
I think it probably hurts people starting up the most as it effectively creates a lot more regulatory risk.
In any case, an economic drag as all bad regulation and regulatory uncertainty is. There's huge uncertainty here as who knows what/if congress will do. "Nothing" is a certitude for a few more months at least. Probably a few more years. Just long enough for it not to be worth creating a business around solving the problem.